Is the increase in ARPU a leading indicator for continued service revenue growth, or are there extraordinary factors in Q2 ARPU?

ARPU increase is driven by the strategy of strengthening the network, extending connected days for prepaid customers, and migrating them to postpaid. In Home, ARPU calibration and lower churn are key, with a one-off boost from FIFA World Cup rights (80% of Home growth in Q2, 60% of total World Cup effect in Q2). “In combination, this is increasing the total ARPU of the base. In Home, the challenge is a little bit different and the result does have a one-off. So the challenging home has to do with stabilizing churn, again, with a very granular investment on the network and also has to do with calibrating the ARPU in, so the new offers are coming with a high ARPU.”

How does Millicom view disruption from satellite players like SpaceX, are they complementary or a threat, and is there potential for partnership?

For mobile, satellite solutions are limited due to poor indoor coverage and low throughput compared to 4G/5G. For fixed business, they are a good complement for remote areas without coverage but not a threat to urban fiber. “When we go to the fixed business, it is a very good solution for remote areas where we don't have coverage. So there, we do see SpaceX gaining a small piece of customers... But for urban areas, it is very difficult or it is a very, very poor experience compared to fiber steel. So in a nutshell, we do see as a complement product for our customers, but we don't see as a threat.”

What is the phasing of integration costs for the next couple of quarters, and does the company stick with its guidance for Colombia's full-year EBITDA margin to be in line with FY '25?

Total restructuring charges for FY26 are expected to be between $160 million and $170 million, with roughly 50% paid in H1 and 50% in H2. Colombia's full-year EBITDA margin is still expected to be roughly in line with FY '25. “overall for the group, I mean, it's not that we want to lock ourselves and you see how fast we are restructuring every week, we find new opportunities in the operation, and it shows in the margin expansion. So what I have visibility today, I would say that we have roughly restructuring charges for the full year between $160 million, $170 million, right?”

TIGO

Millicom (TIGO) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Communication Services· Aug 6, 2026

Source: earnings call transcript

Executive summary

Millicom Q2 FY26 — Record Adjusted EBITDA and Equity Free Cash Flow, Raised Guidance

Millicom delivered a strong second quarter, achieving record adjusted EBITDA and equity free cash flow, driven by robust organic service revenue growth and successful integration efforts. The company raised its full-year equity free cash flow guidance and improved its leverage target, reflecting confidence in its expanded portfolio and disciplined execution. Management emphasized value growth over volume, particularly through its pre-to-post strategy and fixed-mobile convergence.

Highlights

Service revenue reached $2 billion, growing 5% organically year-over-year, its strongest organic growth since 2021.
Record adjusted EBITDA of $1 billion, the first time Millicom has surpassed this milestone in a single quarter.
Record equity free cash flow of $327 million, an increase of more than 50% year-on-year.
Raised 2026 equity free cash flow guidance from at least $900 million to around $1.1 billion.
Improved year-end leverage target to below 2.5x, from 2.73x in Q2 FY26.
Board approved an additional interim dividend of $1.50 per share, payable in two installments in January and April 2027.

Concerns

Reported prepaid and home subscriber figures in Colombia include a normalization effect due to Coltel integration, not reflecting underlying business deterioration.
Chile remains a highly competitive market with aggressive pricing and elevated churn.
Ecuador's Adjusted EBITDA margin is expected to contract a few percentage points in H2 2026 due to Tigo brand launch and associated marketing investments.
Q2 equity free cash flow benefited from favorable expense timing and working capital movements, requiring caution for forecasting the remainder of the year.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Equity Free Cash Flow	around $1.1 billion high materiality	FY26 · 2026	High
Year-end Leverage Target	below 2.5x high materiality	FY26 · 2026	High
Additional Interim Dividend	$1.50 per share medium materiality	2027	High
Colombia Full-year EBITDA Margin	roughly in line with FY '25 medium materiality	FY26 · 2026	Medium
Full-year CapEx over Revenues	around 12% medium materiality	FY26 · 2026	Medium
Ecuador Adjusted EBITDA Margin	contract a few percentage points low materiality	H2 2026	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Group Strongest organic growth since 2021, record adjusted EBITDA. Reported service revenue growth of 60.1% year-on-year. Adjusted EBITDA: $1 billion	$2 billion	5% organically	—	46.3% Adjusted EBITDA margin
Mobile Business (Group) Driven by pre-to-post migration strategy and healthy ARPU trends.	$1.2 billion	6.9% organically	—	—
Home Business (Group) Supported by disciplined pricing, high-value broadband, convergence, and FIFA World Cup content. 80% of growth from World Cup effect in Q2.	$513 million	3% organically	—	—
B2B Segment (Group) Strong momentum, expanding beyond connectivity with higher-value digital services. Digital services revenue: $120 millionDigital services revenue growth: 14% year-over-yearSME segment revenue growth: 8% year-over-year	$401 million	3.8% year-over-year	—	—
Colombia First full quarter reporting Coltel under full ownership; all three business lines contributed to growth. Cost-saving initiatives ahead of plan, including over $30 million severance payments in Q2. Adjusted EBITDA: $336 million	$816 million	11% organically	—	39.4% Adjusted EBITDA margin
Guatemala Outstanding quarter, strongest quarterly performance in 10 years, driven by prepaid to postpaid migration and pricing. EBITDA margin improved by almost 1 percentage point year-on-year. Adjusted EBITDA: $245 million	$382 million	5.9% year-on-year	—	55.6% Adjusted EBITDA margin
Panama Return to top-line growth after regulatory impact in Q1. Adjusted EBITDA broadly stable year-on-year. Adjusted EBITDA: $92 million	$175 million	3.1% year-over-year	—	50.7% Adjusted EBITDA margin
Paraguay Excellent quarter, record adjusted EBITDA margin, supported by postpaid customer base expansion and mobile ARPU increase. Margin expanded by 6.4 percentage points. Adjusted EBITDA: $100 million	$169 million	3.4% year-on-year	—	56.9% Adjusted EBITDA margin
Ecuador Stabilized business, reversed service revenue erosion, substantial progress in margin improvement (up 15.4 percentage points YoY on pro forma basis). Adjusted EBITDA: $58 million	$112 million	broadly flat year-on-year	—	48.9% Adjusted EBITDA margin
Other Markets (Nicaragua, El Salvador, Costa Rica, Bolivia, Uruguay) Demonstrated operational leverage, EBITDA grew faster than revenue (4.7% YoY). Adjusted EBITDA: $194 million	$398 million	2.8% year-on-year	—	46.3% Adjusted EBITDA margin

Deals & partnerships

La Nacion Acquisition of remaining Coltel stake $221 million

M&A-related payments mainly associated with this acquisition.

Lati Sale and leaseback transaction of towers

Impacted lease payments year-on-year due to expansion in operating perimeter and the transaction itself.

Risks & headwinds

Reported prepaid and home subscriber figures in Colombia include a normalization effect Q2 FY26

Not a deterioration in underlying business

Mitigation:Accounting and reporting alignment completed; subscriber trends expected to normalize and growth rates to return to more typical levels over coming quarters.

Chile continues to be a highly competitive market with aggressive pricing and elevated churn Ongoing

Highly competitive market

Mitigation:Applying Millicom playbook focused on efficiencies and simplification; seeing positive signs from industry on pricing movements.

Ecuador Adjusted EBITDA margin expected to contract due to Tigo brand launch remainder of 2026 (H2)

a few percentage points

Mitigation:Planned incremental marketing and promotional investments for brand launch.

Currency appreciation (Guarani vs. USD) impacting costs in Paraguay Q2 FY26

Lower cost in dollars for dollar-denominated content rights

Mitigation:Localized P&L, hedging debt with local currency debt, but still subject to currency movements.

Q2 equity free cash flow benefited from favorable expense timing and working capital movements Q2 FY26

$327 million (record)

Mitigation:Caution advised for forecasting remainder of the year; expect lower Q3 and strong Q4.

What to watch in Q3 FY26

Colombia Subscriber Trends

coming quarters

Current Reported prepaid and home subscriber figures include a normalization effect

Target Subscriber trends to normalize and growth rates to return to more typical levels

Why it matters

Verifies the underlying health of the Colombian business post-integration and accounting alignment.

With this work now substantially behind us, we expect subscriber trends to normalize and growth rates to return to more typical levels over the coming quarters.

Find out whether TIGO delivers this. Inve re-checks your case every morning.

Q&A highlights

How should investors look at the phasing of cash flow given a strong Q2, especially since Q4/Q1 are typically strong?

Q2 was an absolute record for eFCF, so caution is advised for Q3 and Q4. The phasing will likely resemble the first half, with a lower Q3 and a strong Q4.

“Our Q2 is an absolute record equity free cash flow for the company. So that's why I wanted to be a bit cautious on just to keep with another 2 quarters in Q3 and Q4. I think it will look a little bit like the first half of the year. I think that's a fair way to look at it. for the rest of the year. So a lower Q3 and then a strong Q4 during the year.”

asked by Andreas Joelsson · answered by Bart Vanhaeren

2 min read 7 chapters

Detailed narrative

Strong Q2 Performance & Strategic Execution

Millicom achieved its strongest organic service revenue growth since 2021, reaching $2 billion, and recorded its first-ever $1 billion adjusted EBITDA quarter. This performance was attributed to disciplined execution of its 'more for more' strategy, pre-to-post migration, and efficiency improvements, demonstrating the strength of its operating model even while integrating new businesses and absorbing restructuring costs.

Colombia Integration & Subscriber Harmonization

The integration of Coltel in Colombia is progressing well, with subscriber reporting standards harmonized, leading to a normalization effect on reported prepaid and home subscriber figures. Management emphasized that this is an accounting alignment, not a deterioration, and underlying commercial momentum remains healthy, with postpaid net adds increasing by 167,000 sequentially (excluding M&A).

Mobile Business Growth Drivers

The mobile strategy, built on disciplined prepaid base management and targeted pre-to-post migration, continues to deliver strong results. The postpaid customer base grew over 31% year-over-year, with approximately two-thirds of new postpaid sales coming from prepaid migrations. This strategy, now applied across a larger customer base, drove mobile service revenue growth of 6.9% organically to $1.2 billion.

Home Business Turnaround

The Home segment showed continued improvement with a more rational competitive environment, focusing on network quality and higher broadband speeds. Despite subscriber harmonization, service revenue grew 3% organically to $513 million, supported by disciplined pricing, high-value broadband offers, and increasing fixed-mobile convergence (FMC penetration approaching 40%). The FIFA World Cup content also provided a significant revenue boost.

B2B Segment Expansion

The B2B segment maintained strong momentum, with digital services revenue increasing 14% year-over-year to $120 million, reflecting demand for cloud, cybersecurity, and managed services. Overall B2B service revenue grew 3.8% to $401 million, driven by strong performance across SME, Corporate, and Government segments, strengthening the quality of the B2B revenue base beyond basic connectivity.

Guatemala & Chile Market Dynamics

Guatemala delivered an outstanding quarter, with mobile service revenue growing 6.4% to $295 million, driven by a high prepaid-to-postpaid conversion rate (86% of new postpaid sales). In Chile, the company is applying its playbook, focusing on efficiencies, which has already improved adjusted EBITDA sustainability and eFCF margin by 10 percentage points year-over-year, despite a highly competitive market.

Capital Allocation & Shareholder Returns

The company's strong performance led to a raised 2026 equity free cash flow guidance to around $1.1 billion and an improved year-end leverage target to below 2.5x. The Board approved an additional interim dividend of $1.50 per share, payable in two installments in January and April 2027, consistent with a policy of distributing approximately two-thirds of equity free cash flow.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.